NO CAUSE FOR ALARM

MPs reject bid to exempt KAA from KQ nationalisation plan

Transport committee says there is nothing to worry about as there is no merger of KQ and KAA.

In Summary

•Lawmakers deny claims the bill was drafted outside the normal procedures.

•Committee says it was drawn by the Attorney General and approved by the Cabinet before transmission to the National Assembly

Kenya Airways planes at JKIA.
Kenya Airways planes at JKIA.
Image: Douglas Okiddy

MPs have rejected a bid for Kenya Airports Authority to be excluded from being part of the operating entities being created in the plan to nationalise Kenya Airways.

The National Assembly Transport committee chaired by Pokot South MP David Pkosing says KAA would not lose its autonomy in the proposed aviation holding company.

The National Aviation Management Bill, 2020 seeks to create the Kenya Aviation Corporation whose operating entities would be KAA, KQ, and Aviation Investment Corporation.

 
 

In its report following a second phase of public participation, the committee says there is no cause for alarm since there is no KAA-KQ merger.

“The Bill does not seek to merge Kenya Airways and the Kenya Airports Authority within the meaning of the Competition Act but to consolidate the aviation assets so as to effectively compete in the international market,” the report reads.

A group of lawyers led by the Law Society of Kenya sought that KAA be separated in the proposed revitalisation of the national carrier.

They argued that KQ, being a loss-making entity, should not be merged with the profitable KAA in any arrangement that burdens the latter.

MPs have also rejected calls that President Uhuru Kenyatta should not chair the proposed National Aviation Council.

“The President has power to perform any executive function provided for in the Constitution or in national legislation.”

Pkosing’s team said the council would operate as an unincorporated institution whose functions are not of operational nature but to give policy direction.

 
 

Persons seeking to chair the KAC board will be required to have bachelors degree in aviation, business administration, finance, audit, law, and engineering.

MPs have also locked other professions other than business, aviation, and engineering from being board members of the corporation.

MPs have also acceded to requests by the public for the Salaries and Remuneration Commission to regulate salaries paid to directors and board members.

The lawmakers have further rejected calls to drop amendments to various laws that were to grant exemptions to the operating entities for smoother operations.

Pkosing, in the report tabled in Parliament on Tuesday, said the proposals to the State Corporations Act; the Public Finance Management Act, 2015 and the Companies Act, 2015 were informed by Parliament’s recommendations on the initial proposal for JKIA takeover by KQ.

“The House approved that, upon nationalisation of KQ, amendments be made to include exemptions in the State Corporations Act, the PFM Act, the Public Procurement and Asset Disposal Act and the Public Service Commission Act.”

“As such, the proposed amendments do not expand the subject matter of the bill,” the Transport committee said.

MPs have also allowed the Environment Cabinet Secretary to get a slot in the council chaired by the President citing the importance of meteorological services in the aviation sector.

They said the Transport and Environment ministries need to consult further on the sharing of the proceeds from the passenger service charge.

The Met department sought that the 30 per cent of air passenger service charge be apportioned as proceeds for recovery of costs for meteorological services.

Pkosing’s committee further allayed fears the Aviation Bill was not hinged on a policy paper, saying the nationalisation plan was recommended by the National Assembly.

“The policy framework was derived from the recommendations after an extensive inquiry into the proposed KQ privately initiated investment proposal. The report was adopted in July 2019,” the report reads.

They also recommended that the Transport Cabinet Secretary makes regulations on allotment, usage, and reallocation of airline slots within airports.

Also sought are rules that enhance stakeholder or public participation in matters on the operations of KAA, KQ, and the investment wing.

Transport CS is also expected to draw rules on aeronautical studies and risk assessment; safety of aircraft, vehicles and persons using aerodromes.

Also sought are rules preventing or minimizing obstruction within and around aerodromes; preservation of order within aerodromes and preventing damage to property.

The CS is also expected to draw regulations on restriction of advertising within aerodromes; movement of persons entering or leaving aerodromes; vehicle traffic – including speed limits.